points in Berkshire, Hampden, Hampshire, and Franklin Counties, Mass.

Vendor operates as a motor common carrier of property in interstate or foreign commerce solely within New York State, in part under a certificate issued by this Commission, and in part under the second proviso of section 206 (a) of the act, herein called the proviso. Under its certificate issued February 28, 1947, in No. MC943, it is authorized to transport general commodities, with exceptions, over regular routes, between Albany and Buffalo, over New York Highway 5, via Schenectady, Utica, Syracuse, Elbridge, Auburn, Geneva, Batavia, and Clarence serving all intermediate points, and the off-route points of Norwich, Glens Falls, Watervliet, Troy, Cohoes, and Saratoga Springs and those within 15 miles of either side of the highway specified; between a point just west of Elbridge and Buffalo, over New York Highways 31B, 31 and 33 via Rochester, Batavia, and Crittenden, serving all intermediate points; and between Utica and Malone via Boonville, Antwerp, Ogdensburg, Waddington, and Massena, and also via Canton and Potsdam with certain short, cross-connecting routes northeast of Ogdensburg, serving all intermediate points. Its operations under the proviso are described in a "registration" application filed June 15, 1942, in No. MC-943 (Sub-No. 2), supported by New York intrastate certificate of public convenience and necessity 1353 issued April 28, 1942, as between Albany and Syracuse, over New York Highway 5 via Schenectady and Utica (also over the New York Highway 5S between Schenectady and Utica), and between Albany and Schenectady over New York Highways 32 and 7, serving all intermediate points, and numerous specified off-route points in Albany, Rensselaer, Schenectady, Montgomery, Fulton, Herkimer, Madison, Onondaga, Saratoga, Oswego, Monroe, Jefferson, and Oneida Counties; and over irregular routes, between points in Oneida County, between points in Oneida County, on the one hand, and, on the other, points in Franklin, Jefferson, and St. Lawrence Counties, between points in St. Lawrence County from points in St. Lawrence County to points in Jefferson County and from points in Franklin, Jefferson, and Lewis Counties to a point in St. Lawrence County.

As above indicated, the operations of vendor described as being conducted under the proviso substantially overlap the regular-route authority covered by its certificate in No. MC-943. For example, vendor's certificate authorizes regular-route operations between Albany and Buffalo over New York Highway 5, serving all intermediate points, six specified off-route points, and all points within 15 miles of either side of the highway as off-route points. The "registration" application describes operations under the proviso, over regular routes, be

tween Albany and Syracuse, over New York Highways 5 and 5S,1 and between Albany and Syracuse over New York Highways 32 and 7, serving all intermediate points and numerous off-route points. Of the intermediate and off-route points described as served in interstate or foreign commerce under the proviso, all but Berlin in Rensselaer County, Northville in Fulton County, Hamilton and Georgetown in Madison County, Oswego in Oswego County, and Watertown in Jefferson County are either intermediate or off-route points authorized to be served under the certificate in No. MC-943. Vendor has additional regular-route authority under its certificate, serving all intermediate points, between Utica and Malone, over a route traversing Oneida, Lewis, Jefferson, St. Lawrence, and Franklin Counties. Vendor serves all points in those counties, over irregular routes, under the proviso.

Under agreement of January 17, 1947, vendee would purchase, free of encumbrance, for $7,500, all vendor's above-described operating rights covered by the certificate in No. MC-943 issued February 28, 1942. Of the purchase price, $3,750 was paid upon the signing of the agreement and is to be returned if the application should be disapproved. The remainder would be payable upon approval herein. Vendor agrees to hold vendee harmless from any proceeding instituted by this Commission, by any other Federal or State regulatory authorities, court, tribunal, or individual for any reason growing out of acts committed by vendor in conducting its business under the operating rights before approval herein.

Vendee's balance sheet 2 as of February 28, 1947, shows assets aggregating 67,070, consisting of: Current assets $17,997, principally cash, $7,556 and accounts receivable $9,692; carrier operating property, less depreciation, $29,959; intangible property $13,846; and prepayments $5,268. Its liabilities were: Current liabilities $36,847, principally notes payable $9,300, accounts payable $10,478, and loans payable $13,800, including $12,000 payable to officers; equipment obligations $5,502; reserve $2,586; capital stock $10,000; and earned surplus $12,135. Its income statements for the fiscal years ended October 31, 1945 and 1946 and for 4 months ended February 28, 1947, show net incomes before provision for income taxes, of $2,147, $2,819, and $10,343, respectively, and after provision for income taxes, $1,610, $2,059, and $7,758, respectively. Vendee proposes, that at least 10 years be allowed within which to amortize the proposed purchase

1 New York Highways 5 and 58 closely parallel each other between Schenectady and Utica, being separated only by the Mohawk River.

This balance sheet already reflects the proposed transaction by increasing the intangible property account by $7,500, and increasing the accounts payable by the remaining balance of the purchase price, $3,750.

price, but it is willing, if we require, to amortize the amount within a shorter period. In our opinion a 5-year period should not prove too burdensome, and our findings will be conditioned accordingly. No fixed charges would be incurred as a result of the transaction.

Vendor's balance sheet as of February 28, 1947, shows assets aggregating $88,815, consisting of: Current assets $18,537, principally accounts receivable $18,128; carrier operating property, less depreciation, $38,093; intangible property $14,700; and prepayments $17,485. Its liabilities were: Current liabilities $41,309, principally notes payable $5,960 and accounts payable $23,635; equipment and other longterm obligations $46,727; deferred credits $3,850; capital stock $39,800; and surplus (debit balance) $42,871. Its income statements show, for 1945, net income of $6,646 before, and $4,960 after, provision for income taxes; for 1946 a deficit of $60,817; and, for the first 2 months of 1947, net income of $1,648, before provision for income taxes. The routes of vendee and those proposed to be purchased from vendor connect at Albany. Vendee is authorized to serve off-route points within 10 miles of Albany, and vendor authorized to serve those within 15 miles of one of its routes entering Albany. As a result of the purchase, vendee would extend its operations from Albany north to Ogdensburg and Malone via Utica, and west to Buffalo. Vendee now has 25 employees and maintains terminals at Albany, Springfield, and Pittsfield where its main office is located. Under the unified operation, vendee would need about 14 additional employees, would establish terminal facilities at Utica, Syracuse, Rochester, and Buffalo, and would use about 8 additional tractors and 12 trailers. It would provide through service between important points on its present routes, such as Pittsfield, Springfield, and North Adams, on the one hand, and points on the route purchased, such as Buffalo, Rochester, Syracuse, Ogdensburg, Utica, and Rome, on the other, which embraces some of the most substantial industrial communities in the United States. At least 50 percent of vendee's over-all tonnage originates at or is destined to points on the vendor's regular routes. It now interchanges shipments with vendor at Albany. Under the unified operation, it expects to reduce time in transit by at least 12 hours through avoiding that interchange and to increase its annual gross revenue substantially. Vendor's employees would not be adversely affected by the transaction. A railroad provides service between Springfield and Buffalo, another motor carrier provides through service, and others provide a two-line service.

Four representatives of shippers now served by the vendee testified in support of the application. These shippers all have traffic moving to or from points served by the vendor and desire the proposed through service. One of the shippers, located at Pittsfield, has experienced

delays and damage to shipments of paper, caused by the present interchange at Albany. Another, which manufactures radio, radar, and telephone equipment at North Adams, receives shipments from Utica, Rome, and Buffalo, and the proposed service would eliminate the present delay of 3 or 4 days. A manufacturer of photographic products, with factories at North Adams and Williamstown, receives shipments from points on vendor's routes and desires the proposed service because it would reduce delay resulting from interchange. A manufacturer of insulating wire and cord sets at Williamstown has had complaints from customers on the condition of shipments and believes that the unified operation will serve to reduce these complaints. Vendor desires to sell the rights in order to reduce the scope of its operations. It proposes to sell all its rights under the certificate in No. MC-943, but to retain and continue the operations over the routes and between the points described as being conducted under the proviso in No. MC-943 (Sub-No. 2). As above indicated, operations which vendor conducts under its certificate are substantially over the same routes and between the same points also described as conducted by it under the proviso. If the proposal were approved, two carriers, vendee under the certificate and vendor under the proviso, would operate over the same routes between Albany and Syracuse via Utica, serving the same off-route points, and the two operations would result from the previous operations of the single carrier. Counsel contends, however, that vendor should be permitted to sell the operations authorized by the certificate, and, at the same time, to continue the same operations under the proviso because the "very nature" of the rights is different, those in the certificate having been granted under the "grandfather" clause, and the others being represented by an exemption from the certificate requirements contained in the act. In our opinion this argument is without merit and overlooks the fact that vendor is a single entity, able to conduct only one operation with one service so far as shippers, competitors, and legal responsibility are concerned. In practical effect, the proposal is not distinguishable from an ordinary "split" of operating rights, which has consistently been disapproved. H. P. Welch Co.-Purchase-E. J. Scannell, Inc., 25 M. C. C. 558. In numerous other proceedings, the Commission has declined to approve proposals where severance of the interstate rights from the generally corresponding intrastate rights might result in the creation of two operations in interstate or foreign commerce between the same points. Compare Jack Cole Co., Inc.— Purchase-Richardson, 39 M. C. C. 533, Alamo Motor Lines—Purchase-Inter-City Motor Exp., Inc., 45 M. C. C. 495, and Courier Exp., Inc.-Purchase-Huber Motor Transp. Co., 45 M. C. C. 688. In Simpson-Purchase-A. A. A. Highway Exp., Inc., 45 M. C. C. 463, as a

condition to approval of the transaction proposed, division 4 required cancellation of rights covered by the certificate involved, which authorized operations duplicating those conducted by another carrier under the proviso by virtue of intrastate rights formerly held and operated by the holder of the certificate. With respect to this phase of the matter the division stated:

We are of the opinion and find that only one interstate operating right may properly emerge from the single operation conducted by Triple A [vendor] between Atlanta and Lawrenceville, over U. S. Highway 29, and that the procedure used by the parties in attempting to create two interstate operations may not be sanctioned in the public interest. The fact that Simpson proposes to conduct only an overhead operation over the same route is not material, * * *. Such a proposal, in the absence [of evidence] establishing that the public convenience and necessity require the additional operation, after appropriate notice and opportunity for hearing, would be contrary to the principle stated in H. P. Welch Co.-Purchase-E. J. Scannell, Inc., 25 M. C. C. 558, 567.

Here the intrastate rights would be retained and used by vendor as a basis for continuing, under the proviso, substantially the same interstate operations sold over regular routes. At the hearing, vendor's president was undecided whether it would consummate the transaction in the event we should require, as a condition to approval, that it discontinue all operations in interstate or foreign commerce under the proviso duplicating those sold. Whether vendor can conduct profitable regular-route operations solely in intrastate commerce under the retained rights is not established. However, as the authority granted herein is permissive only, and may or may not be exercised at the election of the parties, our findings will be conditioned to require that, if the transaction is consummated, and coincidentally with consummation, vendor shall cease all operation in interstate or foreign commerce under the proviso by virtue of its possession of New York intrastate certificate of public convenience and necessity 1353, issued April 28, 1942, except those above described as conducted over irregular routes, and shall file an appropriate petition requesting amendment of its application, supported by that State certificate, filed in No. MC-943 (SubNo. 2) on June 15, 1942, so as to limit its future operations in interstate or foreign commerce, under the proviso to those authorized over irregular routes.

We find that the purchase by Brown's Express, Inc., of certain

In this proceeding Simpson had acquired the underlying intrastate rights in advance of Commission approval of the transaction involving his purchase of both the certificated interstate and corresponding intrastate rights. Simpson then sold a portion of the newly acquired intrastate certificate to a partnership which immediately filed a Form B. M. C. 75 statement with this Commission and commenced operations in interstate or foreign commerce under the proviso.